Before you start your home search, youÂ want to know how much you can afford, right?
There are two ways to do this: with a mortgage pre-qualification and a mortgage pre-approval. As a home buyer, the pre-approval is more valuable to you during your home search.
How Pre-Approval Helps You as a Home Buyer
One of the main differences between mortgage pre-qualification and mortgage pre-approval isÂ how the lender gives you the mortgage amount.
For pre-qualification, you give the mortgage lender yourÂ generalÂ financial history (including debts and income), and the lender gives you a mortgage estimate.Â For pre-approval, the lender digs deep into your credit report and gives you the exact loan amount.
If youâ€™re choosing between getting pre-qualified for a home mortgage and getting pre-approved, choose to get pre-approved. Here are the top three reasons why:
3.Â You Learn Exactly What You Can Afford
Thereâ€™s no estimates in a pre-approval. The lender has looked into your credit history and youâ€™ve given the required documentation to go through with the pre-approval process.
A mortgage pre-approval is not a commitment to the loan,Â but it paves the way to transition into applying for a specific propertyÂ â€” your dream home in your price range.
2. Â You Can Narrow Your Home Search
When youâ€™re pre-approved, youâ€™ll know exactly what you can afford, and tailor your home search around the mortgage amount. Now you can easily search through the listings with confidence and renewed energy.
1. The Home Seller Takes Your Offer Seriously
Home sellers like to see that youâ€™re pre-approvedÂ â€” it tells them that youâ€™re serious about buying their home.
So when youâ€™re competing with other home buyers to make the best offer on your dream home, being pre-approved will give you the competitive edge over buyers who are not. ThenÂ you can focus on moving into your new home!
Weâ€™re Your Real Estate Experts
If you want more information about the mortgage pre-approval process or about finding the perfect home that fits your lifestyle, contact us today and we can get started. Weâ€™d be happy to answer any questions you have about the mortgage pre-approval process.